Thursday, August 1, 2013

15% Up: First look at July's electricity figures.

It's by-election day in Ontario.

It's also the first day of August - meaning I've been running July's numbers for Ontario's electricity sector (preliminary monthly report and supply cost estimates) .

Demand down ~5.5% from July 2012, and price up ~14.5%, based on the IESO's low second estimate of the global adjustment rate (low meaning the millions divided by the demand in Ontario is higher than the rate projected).
The 14.5% is essentially the year-to-date increase over the first 7 months of 2012.  Most Ontarians will not yet realize the increase, but they'll become suddenly aware when new regulated pricing plans are set for November.
Inexplicable price hikes peaking in June
followed by inexplicable drop in July

Here's a striking monthly change:  If you value the Ontario portion of the market as the hourly demand at the Hourly Ontario Energy Price plus the overall total for the global adjustment, you'll find, based on the IESO's estimate of a $593.7 million, that July's total Ontario market value rose $10.2 million from June, while the total electricity demand rose 1.7 million MWh.

That makes the incremental cost of the additional supply required in July less that 7/10ths of a single cent/kWh.

Which is nonsensical: the highest demand months are the lowest cost months only because of extraordinarily poor market design.

It is problematic the government claims conservation should be pursued because it avoids the cost of building generation while this nonsensical relationship exists to the point where a kWh of additional supply appears to cost 7/10th of a cent.

How is Ontario claiming conservation is queen while ignoring the structural perversions it has created to make the highest demand months the cheapest supply months?

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